Deposit & Progress Payment Calculator
Never start a job out of pocket. Structure payments so your cash flow stays positive throughout.
| Milestone | % of contract | Amount |
|---|
What is the Deposit & Progress Payment Calculator?
The Deposit & Progress Payment Calculator builds a milestone payment schedule that keeps contractors cash-flow positive for the entire job — sizing the deposit and each draw so you're never financing the client's project with your own money.
How is it calculated?
Enter the contract price, your expected cost curve (when materials and labor get spent), and the number of milestones. The calculator proposes a deposit and progress-payment schedule where cumulative payments always stay ahead of cumulative costs, and flags any negative-cash-flow gap.
Worked example: how do you split a $25,000 job into a deposit and progress payments?
- Set the contract and split
Total contract value $25,000. Deposit 30%, mid-project milestone 40%, so the final payment is whatever's left: 100% − 30% − 40% = 30%.
- Calculate the deposit due at signing
$25,000 × 30% = $7,500 collected before you buy a single board or send a crew.
- Calculate the mid-project and final payments
Mid-project: $25,000 × 40% = $10,000. Final on completion: $25,000 × 30% = $7,500. The three add back to $25,000.
- Check the deposit against your material outlay
Materials cost $8,000 but the deposit is only $7,500 — a $500 shortfall. The tool flags it and suggests raising the deposit to 32% ($8,000 ÷ $25,000, rounded up).
- Find your worst-case cash exposure
Labor is $3,000/wk × 4 wks = $12,000. Cash out before the mid payment: $8,000 + $12,000 = $20,000. Minus deposit + mid ($7,500 + $10,000 = $17,500) = $2,500 you're fronting.
- Takeaway
The 30/40/30 split leaves you $2,500 out of pocket at the low point and $500 short on materials — nudge the deposit to 32–35% before you sign, then send the schedule in writing.
What deposit and progress-payment splits do contractors actually use?
| Job type | Deposit | Mid-project | Final |
|---|---|---|---|
| Small repair / handyman (under $5k) | 50% | — | 50% |
| Standard remodel (this example) | 30% | 40% | 30% |
| Material-heavy job (cabinets, HVAC) | 35% | 40% | 25% |
| Large multi-phase build | 25% | 50% | 25% |
| New-client / higher-risk job | 33% | 34% | 33% |
| Repeat client, low material cost | 20% | 40% | 40% |
Frequently Asked Questions
How much deposit should a contractor ask for?
Enough to cover early materials plus mobilization — commonly 20–33% of contract price, though several states cap deposits (California: 10% or $1,000, whichever is less, for home improvement). Where caps apply, schedule an early first draw to stay cash-positive.
What is a progress payment schedule?
A milestone-based billing plan tied to completed work stages — e.g., 25% deposit, 25% at rough-in, 25% at drywall, 20% at substantial completion, 5% at punch-list. Each draw should be tied to observable milestones, not calendar dates, and invoiced immediately when the milestone is hit.
How do I avoid going cash-negative mid-project?
Plot cumulative costs against cumulative payments; wherever costs cross above payments, you're the bank. Fix it by front-loading draws, invoicing at milestone completion instead of month-end, and requiring material deposits before large orders. The calculator shows the crossover point instantly.
Should I hold retainage in my contracts?
Expect clients (especially GCs and commercial work) to hold 5–10% retainage until final acceptance. Price it in: retainage is margin you won't see for 30–90 days after completion, so your progress draws must cover full costs without it.
Related Free Tools
Related Reading
Put Your Bookkeeping on Autopilot
Tabby automatically categorizes expenses, finds hidden tax write-offs, and keeps you tax-ready all year — built for freelancers, contractors, and small business owners. Free for 14 days.
Start Free Trial